Douglas Trafelet, managing director of data provider PitchBook, began the session by presenting data on -venture -capital-backed investments in European healthcare and healthtech. This data showed seed stage dealflow increased last year despite a drop in total VC activity for healthcare after record highs for volume and value in 2015.
The highs of 2015 had been led by two large rounds for early-stage deals – $375m raised by Netherlands-based Acerta Pharma and $320m by UK-based Immunocore. Acerta’s traction prompted the largest exit in the sector a year later with a $4bn acquisition, which was the tip of a hot market for exits over the past two years. Six of the 10 largest exits since 2006 have taken place since the start of 2015, primarily in the UK and the Netherlands.
GCV Analytics has tracked similar trends for the global healthcare sector, with a slight fall to 259 corporate venture-backed deals last year compared with 284 in 2015, although the trend has bounced back a little judging from the $2bn invested in 70 rounds in the first three months of this year.
Johnson & Johnson was the most active healthcare CVC since 2014, according to GCV Analytics. Marianne De Backer, vice-president of venture investments at J&J Innovation, said the pace of investment had accelerated over the past few years. Last year, Johnson & Johnson had invested more than $9bn in research and development, agreed 14 acquisitions and licensing partnerships and struck 67 innovation deals as it “built a culture that embraces external innovation”, she said.
J&J Innovation used Johnson & Johnson Development Corporation (JJDC) for strategic investments, Janssen Business Development for mid and late-stage opportunities, JLabs and JLinx as incubators and innovation centres in research hubs globally to tap ideas. Johnson & Johnson was looking for “pre-womb to tomb” opportunities to impact human life, including prevention, materials and new frontiers.
Bernhard Mohr, managing director of Evonik Venture Capital, took the stage to explain how the Germany-based chemicals company’s corporate venturing unit had invested €100m ($110) since 2012 in 15 to 20 deals and VC funds, including Hosen Capital and Pangaea.
Mohr said: “Direct investments in the health sector, [such as VivaSure and Synoste] support Evonik’s ambitions as a key supplier of materials to the pharma and medtech markets. As a strategic investor we actively collaborate with our portfolio companies. We leverage the strengths of Evonik to drive growth at portfolio companies through strategic, technical and commercial expertise.”
Gerard Brett, CEO of Vivasure, an Evonik Venture Capital portfolio business, gave his example of how his Ireland-based medtech company focused on bioabsorbable implant devices had benefited from the investment and partnership.
Martin Frost, CEO of Cambridge Medical Robotics (CMR), showed how robots could reduce unnecessary open surgeries. CMR has been backed by ABB, Cambridge Innovation Capital and LGT and Frost talked through how the Switzerland-based industrial group’s experience with robots and credibility with customers had helped.